31107. Alleged Misbranding of Z-G Herbs. IT. S. v. 24 Packages of Z-G Herbs 
No. 17 Double Strength, 19 Packages of Z-G Herbs No. 17. Tried to 
the court. Judgment for the Government In the district court. Appeal 
to the Circuit Court of Appeals. Judgment of district court reversed. 
Libel dismissed and product ordered returned to claimant. (F. & D. 
No. 30669. Sample No. 36388-A. 
U. S. v. 119 Package* of Z-G Herbs No. 17 Double Strength. Claim and 
answer and motion to dismiss, filed. Motion to dismiss granted. (F. & D. 
No. 31150. Sample No. 45493-A.) 
U. S. v. Sinclair G. Stanley (Z-G Herbs Co.). Demurrer to information 
sustained and information dismissed. (F. & D. No. 32232. Sample Nos. 
43493-A, 43497-A, 43498-A.)
This report is based upon seizure actions against two lots of the above-named 
drug the labeling of which was alleged to be false and fraudulent and a criminal 
prosecution based upon various shipments of the drug.
On June 26 and September 26, 1933, the United States attorneys for the 
Eastern District of Michigan and the Southern District of New York filed 
libels against 24 packages of Z-G Herbs No. 17 Double Strength and 19 packages 
of Z-G Herbs No. 17 at Detroit, Mich., and 119 packages of Z-G Herbs No. 17 
Double- Strength at New York, N. Y., alleging that the article had been shipped 
in interstate commerce on or about June 7 and August 12, 1933, by the Z-G 
Herbs Co. from Chicago, Ill. and charging that it was misbranded in violation 
of the food and drugs act as amended.
On January 7, 1935, an Information was filed in the Northern District of 
Illinois against Sinclair G. Stanley, trading as the Z-G Herbs Co., Chicago, Ill., 
charging interstate shipment by the defendant of certain quantities of Z-G 
Herbs from the State of Illinois into the States of Michigan and New York, 
also a quantity of the same drug product into the State of New Jersey.
It was alleged in the libels and in the information that the following repre- 
sentations in the labeling, (carton for both products) "of unequaled value in 
all stomach, intestinal, digestive and blood disturbances. It is a powerful blood 
purifier and tonic * * * for tonic effect * * * Children * * * it 
certainly will improve their appetite making them strong and healthy," were 
statements regarding the curative or therapeutic effects of the article and were 
false and fraudulent.
On February IS, 1935, the defendant Sinclair G. Stanley filed a motion to 
quash the information filed in the Northern District of Illinois, which motion 
was overruled but the defendant was granted leave to file a demurrer. On 
April 29, 1935, the court sustained the demurrer to the information without 
opinion.
On April 30, 1936, Sinclair G. Stanley, trading as the Z-G Herbs Co., claimant 
in both seizure actions, having moved for dismissal of the libel filed in the 
Southern District of New York the motion was granted with the following 
opinion:
HULBEBT, District Judge. "After the institution of this action, the Government 
proceeded against the claimant by filing an information in criminal proceedings 
in the District Court of the United States for the Northern District of Illinois, 
eastern division.
"The second count of the information covers the precise shipment of mer- 
chandise which is the subject matter of this action.
"On April 29,1935, the court sustained a demurrer to said information, writing 
no opinion. Among the grounds of the demurrer, were: "The count does not 
charge any offense under the Pure Foods and Drug Act or any law of the 
United States because the count shows on its face that the statements, designs, 
or devices alleged to have been borne by the packages were not statements of 
curative or therapeutic effect, and therefore the court does not charge that 
the packages bore statements, designs, or devices regarding curative or thera- 
peutic effect. The count does not charge any offense under the Pure Foods 
and Drugs Act or any of the laws of the United States, because the count does 
not allege any statements, designs, or devices regarding the curative or thera- 
peutic effect which are false and fraudulent or which could be deemed false 
and fraudulent.'
"In United States v. Qppenheimer, 242 U. S. 85, the court said at page 87: I 
'We do not suppose that it would be doubted that a judgment upon a demurrer 
to the merits would be a bar to a second indictment in the same words.   *   *   * 
Of course the quashing of a bad indictment^ is no bar for a prosecution upon 
a good one   *   *   *.'
"The Government neither appealed nor filed a superseding information but 
the defendant amended its answer in this action to set up that judgment as res 
adjudicata and now moves to dismiss.
"In Northern Pacific v. Slaught, 205 U. S. 122, it was held that a judgment on 
demurrer is as conclusive as one rendered upon proof. The court there said: 
'The record shows that the demurrer was not upon mere formal, or technical de- 
fects, but went to the merits.'
"The court is loathe to interpret the determination made by another judge in 
another district, but from the record before me in that case it appears that the 
demurrer was sustained upon the ground that the goods were not misbranded. It 
was, therefore, disposed of upon the merits and not upon a mere technical defect
"Motion granted.    Settle order on 2 days' notice."
On April 14, 1936, the claimant filed an amended answer to the libel filed in 
the Eastern District of Michigan denying the allegations of the libel and setting 
up as an affirmative defense that the dismissal of the information filed in the 
Northern District of Illinois was res judicata.
On December 6, 1937, the claimant's motion to dismiss was denied. On July 
1,1938, the case came on for trial in the district court and judgment was entered 
for the Government. In pronouncing judgment for the Government the court 
handed down the following opinion:
O BEIEN, District Judge. "The court finds that by a preponderance of the evi- 
dence the Government has sustained its case in every essential element. There 
is no question but that the articles libeled come into this jurisdiction in interstate 
commerce.   In fact, I assume that is admitted."
Mr. CLABKE. "That is not admitted, if the court please."
The COURT. "Then I so find that that is established by a preponderance of the 
evidence. And as to each of the elements alleged in the libel that are necessary 
for the sustaining of the Government's case, I find that each has been sustained 
by a fair preponderance of the evidence.
"The only thing in the allegations in the libel that I want to comment on.is 
paragraph 4 of the libel, which alleges that said products are misbranded in 
violation of section 8, of the Food and Drug Law, paragraph 3 as amended, in 
the case of the drugs, and the following statements appearing upon the carton 
of the product are statements regarding curative and therapeutic effects of the 
articles and are false and fraudulent in this, that the articles contain no ingredient 
or combination of ingredients capable of producing the effect claimed and that 
the same were applied to the said articles knowingly and in reckless and wanton 
disregard of their truth and falsity.
"Then follows the legend upon the carton, 'Of unequalled value in all 
stomach, intestinal, and blood disturbances, as a powerful blood purifier and 
tonic. For tonic effects on children it will certainly improve their appetite, 
make them strong and healthy.' I find that the Government has sustained 
the allegations in this paragraph that this was misbranding and that it did 
proclaim curative effect and therapeutic effect. In fact, I think that is the 
most dangerous and malignant type. The Food and Drugs Act was passed by 
the Congress of the United States regulating the use, advertising and con- 
sumption, and things of that character, which of course were visible to anyone 
who took them for the purposes indicated, and it was the purpose of that act 
to do away with the sale of dangerous nostrums and patent medicines.
"Then because of the act, the makers of these nostrums, such as this one in 
question here, engaged men more skillful in the use of the English language 
and they then prepared a sort of verbal Houdini act which evaded the spirit 
and the meaning of the law, and yet endeavored to purvey to the ignorant 
upon whom they preyed, the unsuspecting public, their nostrums, very often 
with fatal effect. I cannot conceive of any words more powerful than 'of un- 
equalled value.' There is not any expression that I can think of that surpasses 
it in its all-embracing claim and promise, and instead of saying 'diseases of 
the stomach, intestinal and digestive tract, and blood diseases,' it says, 'dis- 
turbances,' a more euphonic expression. What can it be but a disease? It 
might mean cancer. It might mean ulcers of the stomach. It might mean 
the most virulent type of infection of the intestinal tract. It might mean 
a disease that called immediately for an emergency operation. That is a dis- 
turbance of the intestinal tract, as the doctor illustrated, as I had in mind while 
he was talking. I would say the only established use for the predominant drug 
in this concoction is as a cathartic. Even a layman knows that if a person with a 
case of appendicitis which called for immediate operative relief took such a
thing, the chances are certainly predominating that there would be a rupture 
and it is possible that there would be peritonitis, and with peritonitis the 
percentage of deaths is prevailing". So the broad and all-comprehensive nature 
of this language that includes every possible kind of disturbance, which means , 
every conceivable kind of disease, the holding out to the public that there 
exists nothing in the world of equal value to this, I think is a misbranding 
that is malignant in its possible effect. It is certainly dangerous to the 
public and in direct violation of the act, the spirit of the act and the wording 
of the act. I find further that these words were used knowingly, with reckless 
and wanton disregard of their truth or falsity.
"For these reasons the Government must prevail in its libel, and the Govern- 
ment may take an order in harmony with the court's opinion.
"The motions of various kinds urged by the claimant for a verdict, every 
motion of the claimant on every ground advanced, is denied and the claimant 
given a general exception to the findings of the court, and an individual 
exception to each denial.
"The proposed findings of fact submitted by the Government are adopted 
by the court. The claimant - may submit, for the purpose of the record, 
proposed findings of fact."
MR. CLARKE. "May I have an exception?"
THE COURT. "I have granted you ah exception. You may have it again if 
you wish. I have granted you a general exception to the statements of the 
court and each individual statement of the court, and each motion denied."
MR. CLARKE. "If the court please, may I have the usual time for bill of 
exceptions?" 
THE COURT. "Twenty and sixty days."
MR. CLARKE. "Also may the court order that the goods seized be not 
condemned?"
THE COURT. "They shall not be condemned. The Government shall preserve 
them until the time for appeal has expired."
MR. CLARKE. "I would like to have an order to make sure that the goods are 
kept and that the case is not academic.   If the goods are not in existence, there 
is no use in quarreling about them." 
MB. RAY. "We have the marshal's return.   They are in his possession." 
THE COURT. "He would not destroy them without an order of the court, and 
this court has made no such order."
Mr. CLARKE. "They were destroyed in New York." 
THE COURT. You can confer with the Government about that." 
The claimant filed an appeal to the Circuit Court of Appeals for the Sixth 
Circuit and on April 9, 1940, the circuit court entered the following order 
reversing the district court and remanding the case for a new trial:
SIMONS, Circuit Judge. "Upon appeal from a judgment rendered against the 
appellant for misbranding articles in violation of section 8 of the Pure Food 
and Drug Law, 21 U. S. C. A. 10.
"It appearing from the stipulation of facts that the articles sought to be 
condemned are the identical articles that formed the basis of an indictment 
against the appellant in the District Court of the United States for the North- 
ern District of Illinois, eastern division, in which court the indictment was, 
upon demurrer, dismissed because showing on its face that the statements, 
designs, or devices alleged to have been borne by the packages were not state- 
ments of curative or therapeutic effect within the language of the statute, in 
consequence of which the indictment was held not to state an offense against 
the United States; and
"It being the view of the court that the decision in the District Court of 
Illinois is res judicata of present issues, the decision there being upon the 
merits with respect to the charge of misbranding.
"It is Hereby Ordered That the judgment below be and it is hereby reversed. 
U. S. v. Oppenheimer, 242 U. S. 85, 87; U. 8. v. Barter, 219 U. S. 72; Coffey v. 
U. S., 116 U. S. 436, 445. To the same effect is U. S. v. 119 Packages, etc., 15 
Fed. Supp. 327 (D. C, N. Y.). The cause is remanded for new trial in con-( 
formity herewith." 
'
On June 11, 1940, the case was reopened by mandate of the Circuit Court of 
Appeals. On September 25, 1940, a motion for judgment in conformation with 
the findings of the Circuit Court of Appeals was filed and judgment thereon 
was entered on October 29, 1940, dismissing the libel and ordering the return 
of the product to the claimant.